Ratio

Ratio Analysis

&

Time Series Analysis

Of

2.1 Ratio and time series analysis of Beximco Pharmaceutical

1. Inventory turnover:

A ratio showing how many times a company's inventory is sold and replaced over a period.

Formula:

Inventory Turnover =Cost of goods sold/Average Inventory.

The ratio and time series analysis of Inventory Turnover of Beximco Pharmaceutical from 2008-2012 is given below-

| Inventory Turnover |

2008 | 1.346 |

2009 | 3.01 |

2010 | 3.50 |

2011 | 1.92 |

2012 | 2.07 |

Interpretation:

The companies ratio increases from 2008 to 2010, then decreases in 2011 and then again increases from 2012.

2. TIE ratio:

Time interest earned ratio (TIE) also known as Interest coverage ratio, indicates how well a company can cover its interest payment on a pretext basis. The larger the time interest earned, the more capable the company is paying the interest on its debt.

Formula:

Earnings before interest and tax / Total interest

]

The ratio and time series analysis of TIE Ratio from 2008-2012 given below-

| Time Interest Earned |

2008 | 4.90 |

2009 | 4.03 |

2010 | 3.21 |

2011 | 3.50 |

2012 | 3.42 |

Interpretation:

The Ratio Increases from 2008 to 2012 to its highest level of 4.90 and then decreases in 2009 & 2010.Again ratio increase 2011. The ratio fluctuation is very high.

3. Gross Profit Margin:

A financial metric used to assess a firm's financial health by revealing the proportion of money left over from revenues after accounting for the cost of goods sold. 

Formula:

Gross Profit Margin=Gross Profit/Sales

Gross profit margin of Beximco Pharmaceutical from 2008-2012 is given below-

| Gross Profit Margin |

2008 | 50% |

2009 | 47.28% |

2010 | 48.88% |

2011 | 47.99% |

2012 | 47.25% |

Interpretation:

The gross margin highest in2008 and decreases in 2009 but increase 2010 and then gradually decreases from 2011 to 2012.

4. Operating Profit Margin:

A...